Economy update: Ennis rentals, real estate market holding own

With the economy in the doldrums, residential rentals are going well in the Ennis area.

That’s according to Mike French at FBM Property Management in Ennis, who attributed some of those rentals to the mortgage lending crunch.

“The rental market’s really strong right now because people can’t afford to purchase, or they’re losing their home, so they're needing a place to rent,” French said.

“December has been good and January has been good – we've seen about a 15-20 percent increase in rentals and applications,” he said.

French said occupancy rates have seen an increase, and that if occupancy rates stay high long enough, rates may go up as well with diminished demand.

As for the real estate sales market locally, as of Monday, there were 126 houses on the market in Ennis ISD as listed for sale through the MLS. That’s down maybe 12 – 15 percent some from last year's market, French estimated.

Days on market, a figure used to determine how long it takes properties to sell on average, has increased to the 90s in the Ennis area from the 60s and 70s last year, he guessed.

“The rental side of it has been really strong – the real estate side has been a little slower, but if you work it, it's out there. If you're getting out there and doing your job, you can find people to buy homes,” he said.

“There are definitely people losing their homes, for non-payment of their mortgage or being foreclosed on, but there are probably less in our area than in others. But we are seeing foreclosures, and it’s definitely higher than it has been in the past,” French said.

There is one up side to the down-tilted economy, he noted.

“The interest rates are low, so if people can qualify, they can purchase homes. The government is trying to do a few things to help people work out their deficits and get back on track, redoing loans with regards to rates and payments,” French said.

“What’s good for Ellis County is good for the Metroplex and vice versa,” Fite said.

The market inventory is running about 6.5 months in the Metroplex, and that's not that bad, Fite estimated.

“It’s been said in real estate that a healthy market is six months – as a point of comparison, there are places in California and Florida that have been on the market for three years, plus. We still have a healthy market. Certainly two years ago, it was a better market with 30 days supply. But that was not realistic – and this is,” Fite said.

While total sales figures for the 2008 year aren’t tallied yet, Fite said preliminary figures for the year show sales indicate the market is down by about 3 percent, with some pockets that have experienced little or no decrease and others that have seen considerably more.

“The areas where it hit home the hardest were the new home subdivisions where the builder overbuilt and owners of pre-owned homes are now wanting to sell, but they’ve only been there a year or two and they're competing against the new home builder who is able to offer incentives,” Fite said.

“On the other hand, many existing neighborhoods that have matured have not been hit as hard. In Ellis County, properties with half-acre and acre-lots and more custom areas have not been hit as hard,” he said.

“The upper end market is starting to feel the pinch of jumbo financing – jumbo interest rates are higher than conforming rates. And you add to that the stock market situations, and some of those folks have been hit by the stock market a little harder,” he said.

Fite said Century 21 Judge Fite has beat the market by 14 percent in unit sales since September, and credits a campaign declaring Real Estate Is Great for the difference. The campaign addresses the reasons people buy homes.

“One reason is investment. But more than that, they want to raise a family, they want a certain school district, they want acreage. They want a smaller home or a larger one. Some have lost their jobs and some have gotten jobs,” Fite said.

“The Dallas-Fort Worth Metroplex is the number three job growth market in the country and the number one in population growth,” he said.